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The Maryland General Assembly has approved legislation to make it easier for condominium associations to suspend use of the common area parking lot, pool and other recreational amenitieswhen an owner is delinquent in paying the condo assessments for more than 60 days.

The new law allows approval by owners with 60 percent of the total eligiblevotes to amend a condominium declaration to provide for the suspension of use of these portions of the condominium common property. This is far less than the 80 percent minimum required by the Maryland Condominium Act for other declaration amendments, and some older condo documents require as much as 100 percent unanimous approval. Continue reading →

Where a word or phrase used in the declaration of covenants for a condominium or homeowners association is not defined in the covenants or by statute, the board of directors has broad discretion to adopt rules which explain how the provisions of the covenants will be applied.

If there are no community rules which define what constitutes a “commercial vehicle”, it is likely that a court would apply the Maryland statutory definition of “commercial motor vehicle” used in connection with the requirements for obtaining a commercial driver’s license. Under that definition, a commercial vehicle includes any vehicle with a gross weight rating of at least 26,001 pounds; a vehicle designed to transport 16 or more passengers; or any size vehicle used to transport hazardous materials. Excluded from the statutory definition are fire and rescue vehicles with audible and visual signals. Continue reading →

Faced with a class action suit based on a Montgomery County towing law which makes a property owner liable for the actions of a towing company which is hired to tow unauthorized vehicles, dozens of condominiums and homeowner associations have agreed to settle the suit by paying nearly $400 per tow.

The suit was filed as a class action suitby vehicle owners against over 500 property owners in connection with over 20,000 tows. It claimed that the towing company improperly asserted a possessory lienon the towed vehicles by refusing to release the vehicle until the tow charges were paid. It also claimed that the towing company violated County and Maryland law by not providing required notices to the vehicle owners when they came to retrieve their vehicles and by imposing charges for credit card payment.

Although the condos, homeowner associations, and other property owners were not directly involved in the violation of towing law procedures, Montgomery law imposes joint and several liabilityon property owners for a towing company’s actions and imposes liability for three times the expenses incurredby the vehicle owner.

The cost of each tow was between $168 and $178 which could have resulted in damages of $504 and $534 per tow. Therefore, the trial court judge who approved the settlement in January 2018 found the settlement of $390 per tow to be “fair, reasonable and adequate”. Each property owner also was required to pay about $28 per tow as a portion of the legal fees incurred to defend and settle the suit based on a pro rata share of the number of tows which were part of the settlement.

Some condominiums, HOAs and other property owners opted not to settle the suit and the litigation of legal defenses and factual issues may continue to trial.

Although many contracts between the property owners and towing company require the towing company to indemnify the property owners for any improper or unlawful action by the towing company, an agreed $22 million judgmentagainst towing the company with a payment of over $300,000 forced the company out of business and left the property owners without recourse against the towing company. The claims against some condos and HOAs were covered by the association’s insurance.

Because condos, homeowner associations, and housing co-ops in Montgomery County, Maryland can be liable for up to three times the cost of an improper tow, each association which tows vehicles from the common property should ensure that its towing contract requires the towing company to provide and follow towing procedures which comply with state and local law.

Posted by Thomas Schild Law Group, LLC, attorneys for condominiums, homeowner associations and housing cooperatives in Maryland -– including Montgomery County, Prince George’s County, Howard County, Frederick County, and Baltimore County; and in Baltimore City and Washington, D.C.

A Maryland condominium Rule which barred delinquent condo owners from using the common property parking lot and swimming pool has been struck down by the Maryland Court of Appeals–the highest state appellate court.

In Elvaton Towne Condominium Regime II v. Rose, the appeals court decided that a condominium board of directors can not rely on general rulemaking authority to adopt a Rule which interfered with the owner’s statutory property right to use the common elements. However, the court ruled that the Maryland Condominium Act permits a condominium Declaration to provide that an owner’s parking and pool privileges may be suspended where the owner is in arrears in payment of condo assessments.

Although recognizing a condo board may adopt reasonable Rules regarding the use of the common elements, the court noted that such Rules must be consistent with the condominium Declaration and Bylaws and with the Maryland Condominium Act.Continue reading →

To tow or not to tow…with apologies to William Shakespeare, that is the question at the heart of long-running litigation between an Anne Arundel County condominium and owners whose vehicles were towed from the condo parking lot. The Maryland Court of Appeals will soon resolve the dispute over a condominium association’s authority to suspend a condo owner’s use of the common elements when the owner is in arrears in payment of condominium assessments. Continue reading →

A Maryland condominium’s policy of towing vehicles of unit owners who are delinquent in payment of condominium assessments was recently struck down by the Maryland Court of Special Appeals–an intermediate appeals court.

In an effort to get owners to pay the condominium assessments, the Board of Directors of an Anne Arundel County condominium passed a rule which prohibited parking in the condominium common element parking lot if an owner was in arrears in payment of condominium assessments and other charges for more than 45 days. The rule was enforced by towing vehicles from the condominium property. The condominium Board also enacted a rule to prohibit use of the community pool by owners who had not paid their assessments.

When the owner filed suit challenging the suspension of the right to use the parking lot and pool, the appeals court concluded that the Board was not authorized to take such action unless the condominium declaration or bylaws were amended to allow suspension of use of the common elements a tool for the collection of delinquent assessments.

The court relied on a prior decision of the Maryland Court of Appeals–the highest state appeals court–and a provision in the Maryland Condominium Act which recognize that the right to use the common elements is a property right which can only be limited by the condominiumdeclaration. Although the Court of Special Appeals ruled that the use of the of common elements could not be restricted by Board rule, it concluded the declaration or bylaws could be amended to allow suspension of the common element parking lot and pool for non-payment of condo assessments.

The court decision in Elevaton Towne Condominium Regime II v. Rose is an “unreported” decision which is not a binding precedent applicable to any other condominium. However, it is instructive on how Maryland courts view limitations on the authority of condominium boards to restrict the use of common elements by owners who are delinquent in paying assessments.

Posted by Thomas Schild Law Group, LLC, attorneys for condominiums, homeowner associations, and housing cooperatives in Maryland counties of Montgomery County, Prince George’s County, Howard County, and Frederick County; and Washington D.C.

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The Thomas Schild Law Group provides legal services to community associations – condominiums, homeowners associations, and cooperatives – in Maryland and the District of Columbia. We also represent property owners regarding contract review, business disputes, and debt collection.

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